Bombardier to boost size of equity offering

TORONTO Feb 20 (Reuters) - Bombardier Inc said on
Friday it is boosting the size of its planned equity offering,
in an indication that the market is ready to bet on a turnaround
in the fortunes of the troubled plane and train maker.

Montreal-based Bombardier said it is increasing its offering
to C$938 million ($749 million) from the planned offering of
C$750 million it outlined on Thursday. If the syndicate of banks
underwriting the offering opts to tap the over-allotment option,
proceeds could jump to C$1.08 billion.

"It's encouraging news and shows good demand at that price
level," said Colin Cieszynski, chief market strategist at CMC
Markets. "Too much demand is certainly better than not enough
demand."

Shares in Bombardier hit a six-year low of C$2.30 on Friday,
but the stock held firmly above the syndicate's buy-in price on
the offering of C$2.21 a share. The offering was priced at a
nearly 10 percent discount to the C$2.45 closing price for
Bombardier's Class B shares on the Toronto Stock Exchange on
Thursday.

Bombardier's shares were down 2.4 percent at C$2.39 in
afternoon trading.

The large discount that Bombardier agreed to underscores the
challenges facing the company, which stunned investors last week
when it replaced its chief executive, suspended its dividends
and said it planned to raise $2 billion in new debt and equity,
due to further cost overruns in its CSeries jet program.

Thomson Reuters trading data indicates that a large portion
of the buy-in orders on the stock on Friday were being driven by
the brokerage arm of National Bank of Canada, which is a
lead underwriter on the offering.

UBS Securities Canada, CIBC and Citigroup Global
Markets Canada Inc are the other lead underwriters on the bought
deal. A bought deal occurs when an underwriter, or a syndicate,
buys shares from an issuer at a set price before selling them to
the public.
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